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Some people have asked for our comment on the #Treasury #EconomicStrategy document
There are two major issues: process and content.
I deal with these in turn.Note: these are not the official views of the @IEJ_SA 👇
Firstly on *process*
National Treasury has gone rogue...again
They have unilaterally published a policy document without engaging
👉government structures
👉ANC structures or
👉civil society (unless you count financial sector economists present at their colloquia).
Given that we are in a deep economic crisis, this Treasury unilateralism is highly irresponsible, as broad engagement on the *nature of the problem* is critical to coming up with *appropriate solutions*. But it now emerges that such engagement was totally absent.
Reliable sources reveal that:
👉The Treasury strategy was not tabled in #Cabinet, & an interdeptal discussion on economic strategies has been sidelined by this unilateral intervention.
👉 The strategy has not been presented to the #ANCNEC for consideration, nor the #ANCETC team
Unfortunately this arrogance of Treasury is not new, but has been repeated over the last 25 years many times, including the
👉Announcement by the Treasury DG in 1996 that #Gear was non-negotiable (without consultation) to
👉Their rewriting of the economic chapter of the #NDP.
The failure to have an inclusive process is reflected in the product, which suggests the authors live in a technocratic bubble which is insulated from the nature & extent of the social & economic crisis confronting the majority of S Afns...which requires a bold creative response
So, to *content*...
The doc is a dense 77 pages. It will take time to analyse in detail -which we'll do in time. But a quick scan reveals there is no "grand plan to rescue the economy" as some in the media have billed it. The paper doesn't seriously confront the current crisis.
The focus is mainly on medium-term microeconomic measures, not urgent interventions to kick start our depressed economy. The word 'stimulus', let alone govts own #StimulusPackage, is not mentioned once!This comes days after NT announced an #austerity programme to slash spending🤬
The ambitions of the 'strategy' are frankly pathetic. Proposing to create a feeble additional 1 million jobs over 10 years! (or 100k jobs a year). To put this in perspective, this will in a decade only absorb around 2 years of new workseekers who will come onto the job market!
The document's sectoral focus, while having some interesting ideas, appears to lack coherence on transformation of the economy (including its focus on services & agriculture versus manufacturing, beneficiation) amongst others.
The doc draws on an eclectic range of ideas, & contains extensive academic references (which some economists are getting excited about), & could be an interesting academic paper for debate. But we don't need a seminar, we need a coherent national economic strategy.
At one level, the doc tries to avoid mentioning hot button issues, like cutbacks, austerity, labour market deregulation etc, as if we haven't noticed that Treasury is actively pursuing such policies/ or recently announced them.
At another level, the paper takes shots at some of govts own policies eg #NMW,#IPAP #IndustrialPolicy etc. It also seems to contradict NTs own policy eg calling for a countercyclical approach, & growth promoting measures, when NT is currently promoting procyclical austerity.
The doc not only is light on using fiscal policy instruments to stimulate investment, excepting its focus on Eskom. It doesn't mention monetary policy! Ironically, it focuses mainly on microeconomic policy but treasury regards itself as the custodian of macro economic policy.
Part of the problem appears to be that Treasury insists on using technocrats and consultants (local & international) who are out of touch with SA realities. The bizarre reference in the doc to the "non-white majority of the population" is but one illustration of this problem.
So while the document may be 'interesting' in some respects to commentators & academics, it appears of little value as an economic strategy to get us out of our current crisis, & will be dead in the water because of NTs unilateral approach.
The urgent task remains to have a serious and inclusive national conversation about a bold, innovative, economic strategy which can move our country forward. The #Treasury document is not a useful basis for this discussion.
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